What is GST (Goods and Services Tax)
Goods and Services Tax (GST) is a unified taxation system to be implemented by the Government of India from the 1st July 2017. The GST is intended to replace all the taxes levied by the central and state governments in various forms ie. excise, sales tax, VAT, entertainment tax, luxury tax etc. The bill for the implementation of the GST law has been passed by the parliament of the nation by '142' constitution amendment act 2017, followed by the passage of Constitution 122nd Amendment Bill. The GST is governed and is being monitored by the GST Council and its Chairman is Union Finance Minister of India - Arun Jaitley. Under GST, all the goods and services will be taxed at the rates of 0%, 5%, 12%, 18%, 28%. Apart from these, there is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold, also an additional cess on sin goods like cigarettes has been incorporated.
Read Important Information About GST
Gen GST Software
Gen GST Software simplifies your GST filing & invoicing. Click here for a free demo.Learn More
A complete GST helpline mobile app for GST information, news and updatesLearn More
There are 4 GST tax rate slabs, including 0%, 5%, 12% and 18% and nil-GSTLearn More
The eligible taxpayers can apply for GST enrollment online on GST portalLearn More
VAT vs GST
GST is a unified tax system that replaces all indirect taxes including VATLearn More
Each GST supply must be accompanied by a valid GST compliant invoiceLearn More
A taxpayer can apply for refunds of excess taxes paid by him under GSTLearn More
GST returns will be filed monthly/yearly by taxpayers on the GST portalLearn More
Users can now also register on GST portal through e-verification via OTPLearn More
Input Tax Credit
A taxpayer can apply for input credit of tax already paid by him on a supply.Learn More
The bill is required for transportation of goods of value over Rs. 50,000.Learn More
Accounts & Record
Taxpayers can access their GST accounts and records through the portalLearn More
The payment of GST tax, penalties, interest, late fees and other amountsLearn More
Penalties & Appeals
There are penalties for violation of GST rules which users can appeal againstLearn More
Unique codes assigned to GST compliant goods and services respectivelyLearn More
The Application Reference Number generated after registration on GST portalLearn More
GST registration scheme for small businesses with turnover less than 75 lakhLearn More
The unique GST Identification Number provided to each registered taxpayerLearn More
There are a few items, services, and conditions which are exempt from GSTLearn More
Issued by a GST recipient to his supplier on receipt of advance paymentLearn More
Issued by a GST taxpayer as a confirmation of the refund of advance paymentLearn More
Bill of Supply
Issued by a supplier on the supply of items on which GST is not applicableLearn More
The GST levied on the interstate supplies between Union TerritoriesLearn More
A situation where the recipient, instead of the supplier, pays GST on a supplyLearn More
It helps you calculate GST rate and liability on eligible goods/servicesLearn More
Industry Wise GST Impact and Solutions
GST impacts on IT services, IT freelancers, companies, and tax applicability.Learn More
How GST affects the tax on consumption/supply of alcohol and liquor itemsLearn More
businesses with an annual turnover of less than 20 lakh need not pay GSTLearn More
GST rate on AC/non-AC restaurants and composition scheme for restaurantsLearn More
GST on the purchase/supply of new and secondhand cars and other vehiclesLearn More
GST has increased the tax rates as well as workloads for the banking sectorLearn More
GST on construction materials, services, real estate purchases and suppliesLearn More
GST on construction materials, services, real estate purchases and suppliesLearn More
Different tax rates have been assigned to different clothing items under GSTLearn More
GST for small & mid-size businesses, enterprises, and GST composition schemeLearn More
Items like petrol and diesel are kept outside of GST cover, as of nowLearn More
The reduced demand of recycled items has decreased ragpickers’ earningsLearn More
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Frequently Asked Questions About GST Bill
The Goods and Service Tax (GST) is now a reality for the people and businesses in India. Ever since the launch of GST in the country, people have been asking several questions to get a better idea of how the new tax system actually works. Here, we try to answer the most common FAQs on GST.
Frequently Asked Questions (FAQs) on GST in India
Goods and Service Tax (GST) is a new destination-based tax that is levied on the sale and purchase of goods and services. It is a consumption based tax, meaning the end consumer is responsible for paying the actual tax. Although the tax will be levied at each stage of the supply chain, the consumers will get input tax credit (ITC) for the tax paid by them at earlier stages, which they can reuse for the payment of the final tax. As a result, a consumer will be paying only the tax amount applied to the final transaction. GST will effectively replace all the existing and previous taxes including VAT, Service Tax, Excise Duty and other taxes in India, thus realizing the concept of “One tax, one nation”.
The tax will be received only by the relevant tax authority which has jurisdiction over the place of consumption (or the place of final supply).
A: GST would effectively replace all the following taxes:
Center levied taxes
- Excise duty
- Duties of Excise on Medicinal and Toilet Preparations
- Additional Duties of Excise on Goods of Special Importance and Textiles and Textile Products
- Additional Duties of Customs (CVD)
- Special Additional Duty of Customs (SAD)
- Service Tax
- Central Surcharges and Cesses related to supply of goods and services
- Luxury Tax
- Entertainment and Amusement Tax (Except those levied by the local bodies)
- Purchase tax
- State Surcharges and Cesses related to supply of goods and services
- Central sales tax
- All forms of Entry tax
- Taxes on advertisement
- Taxes on gambling, lottery, and betting
Alcohol for human consumption, high-speed diesel, Petroleum Products (petroleum crude), motor spirit (petrol), natural gas and aviation turbine fuel & Electricity will not be taxed as per GST rules. These commodities will continue to be taxed according to the previous tax (VAT & Central Excise) system.
The GST system implemented in India is a dual GST with both the Centre and State getting a part of the tax levied on a common base.
The GST charged by the Centre on intrastate (within a state) supply of goods & services is called CGST (Central GST) while the tax levied by the States on the same transaction is called SGST (State GST).
The tax levied by the Centre on all interstate (between two states) supplies of goods and services is called Integrated GST (IGST).
According to the Constitution of India, both the Centre and the States have the right to levy and collect taxes through appropriate procedure. A dual GST system is in place to protect that right.
In the previous system, the fiscal powers were separately assigned between the Centre and the State which were responsible for levying different taxes on different types of services and goods. Under GST, though, the fiscal powers of these two entities may often overlap as they are required to charge the same GST. This is why an amendment (one hundred and first amendment) was made in the Constitution of India under the Constitution Act, 2016 to empower both the Centre and the States to levy and collect the GST.
GST will replace all the indirect taxes being levied on the supply of goods and services in India, thus creating the way for a common national market.
- It removes the cascading tax system (tax on tax) completely.
- It will also reduce the overall tax being paid on many goods.
- It will also improve the value of our products in the international markets.
- The governments are also likely to see growth in their revenue due to the widening of the tax network.
- Also, the unified tax system will be easier to follow and administer.
- It will be easier to receive the input tax credit under GST.
- It increases the efficiency of logistics in India.
- There is the provision of GST composition scheme to ease the process for small businesses.
- Secure and easier online tax filing, credit storage, and management.
GST rates for different products and services are decided jointly by the Centre and the States. The applicable GST rates for various commodities can be found on the official GST portal.
Although GST is a one tax system, the GST Council has finalized five different tax slabs with different tax rates on each slab items.
- GST rate of 5% on good like oil, spices, coffee, tea, etc.
- 12% GST on computers, cycles, foods, and other similar items.
- 18% GST for most products/services
- 28% tax on luxury items and services like tobacco products, SUVs, etc.
- Zero tax (GST-exempted) for basic need products like milk and other food items.
Any taxable person with an aggregate turnover of 20 lakhs or more is liable to pay GST. IGST is to be paid on all inter-state supplies while CGST/ SGST is payable on the intra-state supplies of goods and services.